Telstra to offer customers untimed mobile calls

AUSTRALIANS will be able to make untimed mobile phone calls for the first time under a plan unveiled by Telstra on the eve of the Federal Goverment’s sale of $8 billion worth of shares in the company.

However, the prospectus for the share sale was still being finalised last night as lawyers for the company and the Government argued over wording in key parts of the document.

The sticking points remained the way the document, which will be sent to investors wanting to buy Telstra shares, will present the risks to the company posed by government regulations and details about John Howard’s last-ditch board nominee Geoffrey Cousins.

Telstra chairman Donald McGauchie told Telstra shareholders recently not to vote for Mr Cousins, the former advertising executive and Optus Vision chief, because the board had yet to conduct its probity and independence review of his candidacy.

It remains unclear whether the board will fast-track this process before shareholders vote on the appointment on November 14.

The Government does not want any suggestions in the prospectus that the Telstra board has issues with the appointment. Mr McGauchie could not be reached for comment last night.

Finance Minister Nick Minchin will launch the offer documents in Sydney at 10am (AEST) this morning ahead of a six-week sale process. The prospectus, if completed, is scheduled to be available on the internet before printed copies are available later in the week.

Telstra launched its $1billion third-generation mobile network on Friday, promising market-leading mobile data speeds.

Yesterday it offered untimed mobile calls to business and residential users who sign new contracts on any of its networks, except the soon-to-be-closed CDMA network.

Users will have the choice of a number of plans, with calls priced at either 25c or 35c each, depending on how much the customer spends each month.

Users selecting a $60 monthly contract will only pay 25c per call. Users on a $30 call plan willpay 35c per call. Calls to Telstra mobile phones are cheaper – fixed at as low as 5c a call – across all plans.

“Our research has shown that the fundamental concerns for businesses are controlling, minimising and predicting bottom-line costs,” Telstra business group managing director Deena Shiff said.

“The other fundamental concern is that they need to effectively communicate with colleagues, customers and suppliers wherever they may be.

“It is for these reasons that we have introduced untimed.”

The move comes as Telstra attempts to counter the growing popularity of capped price plans, which allow customers to make a huge number of calls and texts for a fixed monthly rate.

Capped plans were first introduced by Hutchison – owner of the “3″ 3G network – in April 2003 but the trend gathered pace when Vodafone followed suite.

Caps continue to slow revenue growth and reduce profit margins in the $11 billion annual mobile phone market.

Telstra and its rivals are tempting users with record handset subsidies, which cut the price customers pay for a mobile phone, and capped plans as they battle to fill Australia’s seven mobile networks with traffic.

The Telstra prospectus is likely to contain few surprises because extensive information about the company’s operations was delivered at its investor day last Friday and is in the company’s recent annual report.

Existing shareholders will get a two-for-one entitlement to buy new shares and will get guaranteed allocation. Investors will pay a first instalment of $2 with the remainder to be paid in 18 months – a scheme that will see a boosted dividend of 14 per cent for the interim period.

The retail offer will remain open until late this month, with institutions bidding for shares to determine the final price paid by all investors.

Source- http://www.news.com.au